SwissAnalytics
SwissAnalytics Hedge Fund Due Diligence
We consider ourselves to be risk management partners in a broad sense. Our approach to hedge fund due diligence is thus built around the goal of identifying non-traditional risks which can lead to significant losses of capital. Key to this is the distinction between compensated and uncompensated risks.
We thus focus on doing diligence, not cutting any corners and avoid relying upon assumptions or the manager’s own selling points at all costs. If we can’t get comfortable with or independently verify risk factors, managers will lose our confidence and that will be reflected in our analysis.
Hedge Fund Due Diligence Services
Our analysts perform qualitative and quantitative hedge fund due diligence and risk analysis on an alternative investment fund, or fund of funds, providing the client with a comprehensive risk report. The report highlights yellow and red-flags and comments on any weaknesses found. With our approach we are also able to calculate and monitor LTVs.
We perform the following due diligence services for investors:
- Organizational, Operational, Legal and Investment Due Diligence on single investments (gold or silver due diligence report) - such as single funds and funds of funds (top-down)
- Portfolio Risk Analysis (gold or silver portfolio report) - a bottom-up view on the risks of a portfolio of single and/or funds of funds. Portfolio reports can be freely used for client retention and marketing purposes, also available as a white-labelled report.
- Legal Documents Review - an in-depth review of the legal documents of a fund, pointing out potential pitfalls
Service Levels
We offer two levels of hedge fund due diligence:
- Gold Due Diligence
Organizational, operational, legal and strategy related hedge fund due diligence. Qualitative and quantitative risk assessment, dedicated investment manager and administrator questionnaires, a full day of operational due diligence at the manager’s premises, in-depth background checks on the management company and two key persons, 200+ risk factor framework, loss framework analysis, yellow and red flags with short commentaries, comprehensive 20-30 page commentary, access to online document library for all your funds.
- Silver Due Diligence (only SFr. 3,000 per fund)
Organizational, operational, legal and strategy related hedge fund due diligence. Qualitative and quantitative risk assessment, dedicated investment manager and administrator questionnaires, desk-research only, 100+ risk factor framework, yellow and red flags with short commentaries.
Legal Documents Review
We perform an in-depth review of the legal documents of a fund. This typically includes the offering memorandum and articles of association but can encompass other documents such as service provider agreements. Among other things, we highlight hidden costs, contractual risks, conflicts of interest and compare against industry best-practice standards.
A legal documents review is a rather cost-efficient way of eliminating some scenarios of fraud or at least having the necessary transparency to discuss issues with the manager and potentially mitigate those through revision of the documents, or the subsequent drafting of a side-letter.
